Finance – Some Important Aspects

Finance is a common term that is ubiquitous and is one of the most essential aspects of our day to day life. There have been a number of scholars who have derived their own conclusions and tried to interpret this science in their own style and language. However this science is just about money, be it liquid cash or credit. Both these terms have their own applicability but the similarity between these two is the purchasing power that they offer.

Generally speaking, we can say that this science is all about money and it is a science of managing funds. It is about raising and spending the public revenue, in broader terms. It involves various factors such as money, investment, credit and banking, etc. this science actually comprises of three major areas namely, public finance , business finance and personal finance . While taking about the banking scenario we can say that it is referred as lending money and saving money. Time, risk and money are the three fundamental concepts of this science. Any financial activity takes place in accordance to all of these and their correlation decides the precise position of each transaction. Further in this article we are going to explain some important terms related to it;

Credit

This is a popular mean to replace liquid cash. You can avail credit services to make payments and can use it just like cash only. However to avail credit you need to have goodwill or sound financial conditions that positively contribute to your creditworthiness.

Overdraft

It is a well preferred form of financing that benefits people with good credit ratings. Actually it is a facility through which you can avail more credit than the actual amount that you have in your account. Availability, flexibility and convenience are some of the lucrative advantages of overdraft. It is a popular mean to suffice the short-term credit requirements, reason being the high interest rates.

Term loans from banks

Banks usually provide fixed term loans which are of longer period. While taking up any of such loans you need to sign a legal contract.

Venture capital

This is a risk oriented form of financing in to such unquoted companies which can offer high returns on the investments. These are a few business ventures which lack of finds and thus the investors come to fund their needs in return to the stake in the company, this sum is known as venture capital.

Personal financial resources

Personal sources mean the exclusively private sources that you can rely on. Personal saving, business profit and borrowed sum of money from friends and family are some of the examples of personal financial planning.

Above are some of the common yet useful terms of finance that will help you to be aware.